Linklaters has advised the PRC Ministry of Finance (MOF) on its Renminbi (RMB) 23 billion (US$3.65 billion) sovereign bond offering in Hong Kong – by far the largest-ever offshore RMB bond transaction and a testament to the firm’s standing as the market leader for off-shore RMB financing.
Capital Markets partner William Liu, who led the Linklaters’ team, said:
“This is the fourth offshore RMB sovereign bond transaction by China’s Ministry of Finance and Linklaters is honoured and pleased to have acted on all four of these prestigious mandates.”
He added:
“This marks the first time arrangements were made for the special placement of the RMB sovereign bonds to foreign central banks, which serves as a showcase for issuing bonds to overseas investors in the future and is a step towards the internationalisation of the RMB.”
This transaction marks a number of other firsts, including:
- the first time the MOF has listed its sovereign debt: the bonds are listed on the Hong Kong Stock Exchange (HKEX) to commemorate the 15-year anniversary of the reunification of Hong Kong and the PRC;
- the first time, 15-year bonds were issued with a view to lengthening the maturity profile of RMB bonds for benchmarking purposes for the offshore RMB bond market – representing the longest tenor available to date, and;
- the first time the MOF has earmarked a portion (RMB 2 billion) of the institutional tranches of bonds for direct private placement with foreign central banks, moving the Chinese RMB a step closer to becoming a global reserve currency.
In total, six tranches of bonds were issued: one two-year retail tranche (RMB 5.5 billion) and five institutional tranches (RMB 17.5 billion) consisting of three year, five year, seven year, 10 year and 15 year bonds.
The Linklaters team consisted of partner, William Liu, managing associate, Jini Lee and associate, Leo Pan.
